RBS says UK – not Indian – IT staff caused outage

CEO Stephen Hester forced to respond to MPs’ request for more information

The Royal Bank of Scotland (RBS) has told MPs that its Edinburgh-based IT staff were responsible for the systems failure that affected millions of customers for more than a week last month.

It contradicts media reports that claimed a junior IT worker based in India made the error that led to the IT problem that affected 17 million customers of RBS, NatWest and Ulster Bank.

An upgrade made to batch processing software CA 7 from CA Technologies is believed to be at the heart of the failure, and RBS was given until the end of last week to provide a preliminary explanation of the problems to the Treasury Select Committee.

In his letter to Andrew Tyrie, chairman of the committee, Stephen Hester wrote: “The initial reviews we have carried out indicate that the problem was created when maintenance on systems, which are managed and operated by our team in Edinburgh, caused an error in our batch scheduler.

“This error caused the automated batch processing to fail on the night of Tuesday 19 June. The knock-on effects were substantial and required significant manual interventions from our team, compounded because the team could not access the record of transactions that had been processed up to the point of failure.

“The need to first establish at what point processing had stopped delayed subsequent batches and created a substantial backlog.”

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Although banking services have returned to normal for RBS and NatWest customers, Hester acknowledged that Ulster Bank customers are still suffering from the aftermath of the failure, because the Irish bank’s systems are “in part” dependent on NatWest systems.

In a statement today, RBS cited the processing backlog as the reason for the delay in resolving the problem.

“In order to be able to recommence automated batch processing and to move towards a normal state, the batches had to be brought back into sequence.

“Unfortunately for our customers in Ireland, Ulster Bank payments follow in sequence after those of NatWest and RBS. This is because of the way the technology was set up at the time the three banks were integrated,” the company said.

It added: “It in no way reflects the priority we attach to our Ulster Bank customers.”

RBS has proposed to carry out a full investigation, overseen by independent experts, into the causes of the problem “once the critical system recovery tasks are completed”, and report the findings “in due course”.

We have been hearing for years how CIOs and senior IT professionals need to bury the hatchet with line of business managers and, instead of focusing on the latest bleeding-edge technology for its own sake, seek to better understand the overall strategic objectives of their organisations.